1. Field of the Invention
The present invention relates to the field of e-commerce auctions and more particularly to the matching of offer and demand in online auctions operated in an e-commerce computing environment.
2. Description of the Related Art
E-commerce refers to the sale or marketing of goods or services over a computer communications network, for instance the global Internet. Though e-commerce has been part and parcel of computing for many decades, many believe that the development and explosive use of the World Wide Web has catapulted e-commerce as a preferred mode of product and service distribution over and above traditional brick and mortar outlets. In particular, the ubiquity of the e-commerce storefronts has shattered the geographic limitations of traditional in person marketing and sales of goods and services.
E-commerce generally implies direct business to consumer sales of products and services, as well as business to business and consumer to consumer sales of products and services. The modern e-commerce auction forms a substantial component of on-line sales of goods and services. For many, access to an auction style environment for the sale and purchase of goods and services not only enhances the market by providing an efficient price-setting mechanism for those goods and services, but also on-line shoppers find the on-line auction environment to be both productive and entertaining.
Conducting an auction in a conventional brick and mortar environment has proven to be a straightforward process for distributing and acquiring desired goods and services through an efficient price-setting mechanism. Unique to the auction over the traditional commerce setting is the one-time sale of a set of lots at a designated time and place. Accordingly, participants inherently are incentivized to participate in the auction, at least because the participants have traveled to the auction site with an event mentality and, consequently, participants generally maintain the intent to participate in the auction. On-line auctions, however, suffer from the minimal effort required for the consumer to participate in the auction and the sheer number of auctions available for participation through the World Wide Web at any given time.
The ability of the auction environment to produce the sale of efficiently priced goods and services largely depends upon the number of participants engaged in the auction. For auctions of only a few bidders, a price approaching market value seldom results. However, for auctions of many bidders, an efficient market price will result over time. Thus, as a seller, one prefers an auction of many bidders. Conducting an auction on-line, however, runs the risk of an auction that is under-attended or under-bid. To work well, auction market designs must provide thickness in that an auction market design need attract a large enough proportion of the potential participants in the market.
The traditional online auction can be characterized either as a single unit auction or a multi-unit auction. In a single unit auction, a single product or service can be auctioned to the highest bidder. By comparison, in a multi-unit auction, multiple products or services can be offered in a single auction and the products or services can be awarded to the highest bidders in quantities and at a price that follow preset allocation rules.
In a single unit auction, generating enough demand amongst potential bidders can be challenging and requires a substantial marketing effort on the part of the auctioneer. To that end, auctions can be arranged to last days or weeks in an effort to aggregate enough demand for auctioned products or services. Further, sellers can be tempted to place reserve prices on auctioned products or services to protect the sellers from lower than acceptable final pricing for auctioned products or services. Multi-unit auctions compound the problem of demand in that adequate demand must exist for every item in the multi-unit auction before the multi-unit auction can commence. However, in that on-line auctions as compared to traditional brick-and-mortar auctions can promote spontaneous participation amongst consumers, consumers generally prefer, if not require, the availability of an auction in which to participate without substantial delay. Otherwise, consumers tend to lose interest in participating in the auction process. Thus, the necessity of producing a continuous and rapid succession of multi-unit auctions competes with the necessity of generating enough demand for each multi-unit auction in order to ensure the success of the multi-unit auction.